Bristol-Myers raises 2018 forecast, some sales disappoint

NEW YORK (Reuters) - Bristol-Myers Squibb Co (BMY.N) on Thursday significantly raised its full-year earnings forecast even as first-quarter sales of some medicines fell short of expectations and sent shares of the U.S. drugmaker down almost 1 percent.

Logo of global biopharmaceutical company Bristol-Myers Squibb is pictured at the headquarters in Le Passage, near Agen, France March 29, 2018. REUTERS/Regis Duvignau

“Eliquis and Opdivo were very strong,” SunTrust Robinson Humphrey analyst John Boris said, but added: “There was weakness across several of its franchises,” noting sales shortfalls of cancer drugs Sprycel and older immunotherapy Yervoy.

The hepatitis C franchise all but disappeared with sales of just $3 million, while Wall Street was looking for about $56 million. That stood in sharp contrast to AbbVie Inc’s (ABBV.N) hepatitis C drugs, which blew past analysts’ forecasts on Thursday.

Bristol-Myers shares were down 0.7 percent at $51.38, while AbbVie’s were up 3.5 percent at $95.09.

Despite Opdivo’s strong showing, there is concern its important sales in second-line lung cancer will shrink as use of rival Keytruda from Merck & Co (MRK.N) increases as an initial treatment in the most lucrative oncology market.

Bristol-Myers Chief Executive Giovanni Caforio acknowledged the changing competitive dynamics, but expressed optimism for the long term. “I continue to see BMS as a growth company and I do see Opdivo as a growth franchise,” he told analysts.

The company increased its 2018 earnings forecast by well over 9 cents per share as it now sees a lower than previously anticipated tax rate along with a favorable foreign exchange environment.

Bristol-Myers expects 2018 earnings of $3.35 to $3.45 per share, up from its prior view of $3.15 to $3.30 and well ahead of average Wall Street estimates of $3.26 per share. It expects mid-single digit sales growth after previously forecasting low- to mid-single growth.

The company said it expects Eliquis to continue gaining market share both from new patients and converts from generic warfarin.

Yervoy sales dropped 25 percent to $249 million, missing Wall Street estimates by about $32 million. It could see a rebound if use with Opdivo increases. The chemotherapy-sparing combination recently won U.S. approval to treat advanced kidney cancer.

Sprycel sales fell 5 percent to $438 million.

Helped by the new U.S. tax law, Bristol-Myers projected an effective 2018 tax rate of 17 percent to 18 percent, below its previous estimate of about 20 percent.